Business Opportunities and Challenges in IoT

Transcription

1 Business Opportunities and Challenges in IoT Jaimin Shah MD, DEV IT Ltd & Chair, NASSCOM Domestic Council

2 About DEV IT Founded in 1997 in Ahmedabad, India one of the fastest growing metros of India NSE Emerge listed company (NSE:DEVIT), 1 st Ever IT Company from Gujarat on NSE Emerge Branch offices in India, USA and Canada Multi-million US$ turnover with CAGR of 20% More than 30,000 square feet of usable office space 800+ certified and skilled professionals serving more than 300+ clients globally Offering end-to-end solutions to meet IT and ICT needs of clients

3 Awards and Recognitions India SME Forum - Top 100 SME's of INDIA SKOCH - Achiever Order-of-Merit Award for being Top 100 Best SMEs in India & 2017 ISODA - Award for Business Excellence 2017 & 2014 GESIA - Best Work Place ICT or Electronics Industry, Best ICT Managed Service Provider and Best Software Company ITPV - Best Smart Technology Solution for Governance 2016 and Best Managed IT Services Company GESIA - ICT Awards The EXCELLENCIA for Excellence in the ICT Business Channel World - Premier 100 award for 3 consecutive years , 2014 & 2013 Silicon India - 5 Most Promising IT Infrastructure Companies in India CRN Excellence Awards - India s Best Managed Services Provider & 2012 and Best Solution Provider, Software CIO Review - 10 Most Promising IMS Companies in India And many more SME IT Voice in National EC Council of NASSCOM Appraised at CMMi Level 3 ISO 9001:2008 quality certification ISO 27001:2013 quality certification CARE MSE1 Rated Company

4 Indian IoT market is expected to grow significantly 2016 IoT market: USD 1.3 billion IoT Installed Units: 60 million 2020 IoT market: USD 9 billion IoT Installed Units: 1.9 billion Although India began its IoT journey much later than developed economies, the installed base of connected units in India is expected to grow at a rate much faster than them IoT market in India is expected to grow significantly, with the number of connected devices expected to grow ~32X to 1.9 billion and revenue expected to grow ~7X to USD 9 billion by 2020 Source: GoI draft policy on IoT, Industry reports Note: Number of IoT enabled devices mentioned does not include internet-enabled mobile phones 51

5 IoT market in India is expected to be valued at USD 9 bn, with an installed base of 1.9 bn units by 2020 Figure 4.2: IoT market in India (2020e) Figure 4.3: Market size by industry (2020e) Market share 60% 55% Automotive, 11% Healthcare, 10% Retail, 9% Agriculture, 8% BFSI,, 3% Others*, 3% 40% 45% Units Revenue Consumer Industry Transport & Logistics, 13% Manufacturing, 18% Utilities, 25% India IoT installed base (e): 1.9 Bn units India IoT market size (e): USD 9 Bn Key Insights India Industrial IoT market size: USD 4.95 Bn *Others include food technology, education, construction etc. IoT solution deployment for Digital Utilities/ Smart Cities and in the Manufacturing, T&L and Automotive industries will drive the demand for Industrial IoT applications going forward With GoI s focus on building Smart Cities and IoT being a key enabler for this, Utilities share in the IoT market is expected to be the highest With growth and consolidation, owing to the e-commerce boom and regulatory changes such as GST, Transport & Logistics industry will increasingly leverage IoT technology for more efficient operations Rise of the tech-savvy consumer along with increasing smartphone and mobile internet penetration is driving consumer IoT applications in the India market However, consumer IoT adoption is expected to be slower than its industrial counterpart due to cost of IoT devices and security as well as privacy concerns of consumers Source: Deloitte Analysis, Industry reports, Primary research 5

6 Key IoT Case Studies in India (1/2) Leading provider of Building Automation Systems IoT digital experience created for building occupants, allowing users to perform operations such as control AC, book conference rooms, track and navigate building assets IoT in India Leading Telecom Operator Leading Seed Company End-to-end solution developed to track people, moving/ fixed assets for the enterprise segment Smart Farming solution developed, involving detection of plant growth anomalies, yield predictability, etc. to monitor farms Source: Primary research 6

7 Key IoT Case Studies in India (2/2) Leading Real Estate Company Smart Energy Management solution developed with connected meters and automated systems to reduce costs and to monitor energy consumption patterns IoT in India Leading Infrastructure Company Leading Automotive OEM Remote Access Management System developed to reduce and remotely monitor raw material consumption. The system also automates and streamlines processes in production Developed a Connected Car solution comprising dashboard and applications for a car to enable secure communications between the car and mobile customers. This also helps provide health diagnostics data for preventive maintenance of the car Source: Primary research 7

8 IoT presents opportunities for players across the value chain, with Application Vendors expected to garner 50% share of the India IoT market Figure 4.5: Possible opportunities for players in the IoT value chain Hardware Vendors Only Hardware Hardware with applications focused on end-user Full control of integration 10% 20% Network Operators Only Connectivity Third-party products Bespoke products Services for multiple markets and verticals System Integrators 20% Application Vendors Implementation of Application, Network and Infrastructure services Customized software Support services for enterprises Business-process-as-a-service Source: Deloitte Analysis, Industry reports xx% Expected revenue share by % Cloud/ Data Center Data Management services Application enablement Network, Device, Connectivity Management 10

9 Players across the value chain are preparing themselves to capitalize on the IoT market opportunity Hardware Vendors Network Operators System Integrators Application Vendors Key components/ types Sensors Modules Transponders Smart objects such as appliances, cars, machines, etc. Spectrum Connectivity Availability and quality of service Interfaces Solution architecture Back-end integration Installation Data management Platform Service provisioning Analytics/ Cloud CRM/ Billing Key developments Increasing investments in R&D to expand product portfolio in IoT Increased adoption of 3G/ 4G enabled modules for IoT communications Increase in M&A activities to enhance market share and leadership in IoT Increasing investments in networks such as SigFox to raise connectivity revenues Investments being made in both horizontal and vertical capabilities; still no standard approach being followed Marginal play even now in investment for IoT and in M&A activities Increasing investments in marketing consultancy and implementation services Focus on building digital capabilities and solutions in IoT by acquiring niche companies and platforms Focus on both vertical and horizontal solutions including Consumer and Industrial IoT; however, the volumes are more in case of Industrial IoT Change in erstwhile business models involving working with large number of consumers to working with groups of fewer consumers Source: Deloitte Analysis, NASSCOM 11

10 Start-ups offering innovative solutions are playing a key role in driving the growth of IoT in India Start-Up IoT play Start-up ecosystem in India Start-ups comprise majority (60-65%) of the ~120 organization strong Indian IoT ecosystem and are expected to drive growth going forward IoT focused start-ups is a recent phenomenon with 70% of the start-ups that exist today having come up over the last 6 years Start-ups in Industrial IoT applications Majority of Industrial IoT start-ups offer niche solutions and solutions in embedded computing and industrial internet; with upcoming solutions for connected cities and vehicles All such industrial IoT applications help drive business value Start-ups in Consumer IoT applications With lifestyles getting more advanced and connected, most of the Consumer IoT start-ups play in the wearables and connected homes & buildings categories Drivers for growth of Start-ups Source: Deloitte Analysis, NASSCOM Various incubators and accelerators are providing funding, mentorship and networking opportunities to start-ups, in order to help them revolutionize the IoT ecosystem Start-ups offering innovative IoT solutions have attracted over USD 60 million in investments since

11 IoT adoption is expected to grow across industries by 2020 Industry Focus areas Current adoption level Forecasted adoption level, 2020 Utilities Smart cities, Smart grids etc. Manufacturing Connected Supply Chain, Processes, Tools Automotive Connected Cars, Infotainment, Usage Based Insurance Transport & Logistics Location and condition updates of packages, vehicle tracking Healthcare Real time alerts, mitigation of risk of diseases, remote patient monitoring Retail Personalized customer experiences, virtual reality, promotion based sales Agriculture Predictability of weather, livestock and crop monitoring Low High 13

12 Various challenges will need to be overcome to enable IoT adoption and growth in India Figure 4.6: Key challenges in the Indian IoT ecosystem Connectivity Lack of connectivity and internet access can be a major impediment to the growth of IoT in India Privacy and Encryption IoT devices are designed to be able to communicate and relay data to external partners, thus creating a risk to privacy of data Awareness Consumers are not necessarily aware of the benefits of IoT applications in day-to-day life Challenges existing in the Indian IoT ecosystem Cost of technology High cost of IoT technology can be a deterrent in its widespread adoption Source: Deloitte Analysis, Industry reports, Articles Compelling use-cases and viable business models Developing new products can be challenging, especially when profit is dependent on scalability of solutions 21

13 India will need to build on certain core areas to be a global differentiator in IoT Figure 4.7: Enablers for building IoT market in India Role of Government GoI has announced a draft policy on IoT, as part of which it aims to accelerate R&D efforts, provide start-up funding, establish nodal organization for setting standards etc. Growth of IoT in India Technology framework development for India Technology framework comprising capabilities in sensor technology, network infrastructure, standards and augmented intelligence needs to be developed Skill-sets of manpower Cross-functional skill-sets and specialized training are needed to enable successful deployment of IoT by the workforce Innovation at grass-root Start-ups in India need to continue to focus on building innovative IoT solutions, with the support of accelerators and incubators Source: Deloitte Analysis, Department of Electronics and Information Technology 22

14 Government of India has proposed a multidimensional approach to develop the IoT market Figure 4.8: Draft policy on Internet of Things by Government of India Demonstration of domain-specific solutions To develop domain specific strategies for IoT, especially in the areas of smart grid and smart manufacturing Innovation, R&D To identify core areas in IoT R&D and to initiate cloud based open source projects Incubation and capacity building To promote institutional capacity with ERNET* to implement test-beds for all possible devices/ technologies Incentives & engagement To provide funding for IoT based startups and to launch a program focused on export of IoT services Draft Policy on IoT Standards To setup a nodal organization to drive and formalize standards on technology, processes, interoperability, etc. Governance structure To build a legal framework for addressing issues that might arise due to deployment of IoT systems and devices Source: Deloitte Analysis, Department of Electronics and Information Technology * ERNET Education and Research Network India 23

15 India needs to build capabilities in sensor technology, network infrastructure, standards and augmented intelligence Figure 4.9: Trends in India across the technologies in Information Value Loop The type of sensors being used in verticals with the highest adoption are - acoustic, humidity and pressure/ vibration sensors, accelerometer, weight, heart rate and BP sensors, RFID sensors and tags Sensors Use of machines and robots from basic automation to sophisticated applications has picked up in India because of foray of numerous startups in this space Specific applications include warehouse automation, chat-bots for IVR calls, etc. Augmented Behavior Network Most widely used form of connectivity in India is Cellular technology Also, Bluetooth Low Energy (BLE) is used very widely in personal devices, wearables, etc. Data collection via sensors has been a seamless process for companies in India, but intelligence to analyze that information has still not been completely utilized Augmented Intelligence Standards Protocols such as WiFi HART, Dash, Dect, Continnua and LWM2M are being used in India 24 Source: Deloitte Analysis, Primary research, Industry reports

16 Cross-functional skill-sets and specialized training are needed to enable successful deployment of IoT by the workforce Figure 4.11: Current state of talent gaps pertinent to IoT in India Lack of crossfunctional expertise Workforce lacks exposure across all aspects of IoT technology leading to knowledge in silos and lack of application ability Lack of training infrastructure Poor infrastructure, lack of awareness, inadequate supply of trainers are some issues in this area in India Lack of specialized courses makes it difficult to cope with the very frequent changes in hardware configuration and software updates Inadequate hardware knowledge Choice of right hardware, lack of resources for initial prototyping and rapidly changing landscape contribute to difficulties faced by the Indian workforce Lack of adept engineers who can build IoT solution architectures Shortage of UI/ UX engineers Skillsets of engineers have not kept pace with the transformation of IT services to Digital services Source: Deloitte Analysis, Primary research, NASSCOM 25

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